For many landowners, rising property values are a double-edged sword. While appreciating land values can increase equity, they can also lead to significantly higher property tax bills, especially in areas experiencing residential or commercial development.

Fortunately, many states offer Present Use Value (PUV), also known as Current Use Value (CUV), programs that can dramatically reduce property taxes for qualifying farmland and timberland owners.

On a recent episode of the National Land Podcast, Andy Tate, Co-Founder of EcoForesters, explained how these programs work and why more landowners should take advantage of them. Here’s what to know about Present Use Value programs! 

What Is a Present Use Value Program?

Present Use Value programs allow qualifying landowners to have their property taxed based on its current use, such as timber production or farming, instead of its potential development value.

As Tate explained, “They basically will tax you at the value that your property could produce in those products, as opposed to land, which is usually taxed at its highest and best use, which is usually for development.”

For many rural landowners, this difference can translate into substantial annual tax savings while allowing them to continue managing their property as working land.

How Much Can You Save?

The amount varies depending on your state’s program and local land values, but the savings can be significant. “In Western North Carolina,” Tate noted, “a property can sell for $10,000 an acre, while forestry present use value may only be around $400 an acre.”

Because taxes are calculated using the lower assessed value, some landowners may see their taxable value reduced by more than 90%. While every property is different, these programs can save landowners thousands of dollars over time.

Who Qualifies?

Eligibility requirements vary by state, but forestry Present Use Value programs typically require:

• A minimum acreage requirement (often around 20 acres for timberland)
• A professionally prepared forest management plan
• Sustainable forest management practices
• A commitment to keeping the land in forestry production

Agricultural properties often have separate acreage and production requirements. Most programs are designed for private landowners rather than large timber companies or developers. A seasoned Land Professional can help you determine whether your property is eligible for a PUV program. 

Why States Offer These Programs

The purpose isn’t simply to lower taxes, but instead to encourage landowners to keep productive land in agriculture and forestry rather than selling it for development. As Tate explained: “It’s a great conservation tool. It’s a way for landowners to keep their forest land and not be forced to develop it because the taxes have gotten so high.”

As development spreads into rural communities, many landowners find themselves paying taxes based on what their property could become rather than how it’s currently being used. Present Use Value programs help bridge that gap.

Can You Sell Land Enrolled in Present Use Value?

Yes.

One common misconception is that enrolling in a Present Use Value program makes it difficult to sell your property. In reality, buyers often have the option to continue participating in the program if they meet the eligibility requirements.

Tate explained that this can actually make a property more attractive to buyers because they may be able to continue receiving the reduced tax assessment immediately after purchasing the property.

If the new owner chooses to remove the property from the program, they may be responsible for paying a portion of the deferred taxes, depending on state regulations.

Present Use Value vs. Conservation Easements

Although they’re sometimes mentioned together, Present Use Value programs and conservation easements are very different.

A Present Use Value program is voluntary and generally allows landowners to leave the program by paying a limited amount of deferred taxes. A conservation easement, on the other hand, is a permanent legal agreement that restricts future development and remains attached to the property even after it is sold.

As Tate summarized, “The Present Use Value program is a much shorter, easier option… You can come and go as you wish… whereas a conservation easement is a permanent restriction on the deed.”

Whether you’re purchasing timberland, farmland, hunting land, or recreational property, working with an experienced Land Professional can help you understand property tax considerations, management opportunities, and long-term investment potential. Connect with your local Land Professional to learn more about buying, selling, or managing your land.